The consumer is in equilibrium when
A) MRT = MRS.
B) Pₓ/Pᵧ = MUₓ/MUᵧ.
C) the budget line is tangent to the indifference curve at the bundle chosen.
D) All of the above.

Question

Quizplus · Accepted Answer

The consumer is in equilibrium when all three conditions are satisfied, which are A) MRT = MRS, B) Pₓ/Pᵧ = MUₓ/MUᵧ, and C) the budget line is tangent to the indifference curve at the bundle chosen. Therefore, the best choice is D, which includes all of the above conditions.

The Consumer Is in Equilibrium When